Explanation
This Ordinance is submitted to settle three lawsuits against the City pending in the Court of Common Pleas of Franklin County, Ohio: Gutknecht Construction Company v. City of Columbus, Ohio, Case No. 21-CV002381; Gutknecht Construction Company v. City of Columbus, Ohio, Case No. 21-CV002382; and Mr. Excavator, Inc. v. Gutknecht Construction Company, et. al., Case No. 21-CV001568; plus a related case in which the City is not a party: Epic Steel Company v. Gutknecht Construction Company, et al., Case No. 20-CV005949. The cases are consolidated before a single judge. The City payment to settle the claims made in all four lawsuits is Five Hundred Thousand Dollars and zero cents ($500,000.00).
The four lawsuits arise out of two construction projects undertaken by the City at two locations: the Far North Police Station and the Indian Mound Park Recreation Center. The Gutknecht lawsuits arise out of the City’s withholding of certain payments and refusal to pay certain other payments in connection with Gutknecht’s construction work on the two projects as general contractor.
Under the proposed settlement, funds held back by the Department of Finance and Management for the Far North Police Station project are available in the amount of Three Hundred Twenty-Three Thousand Dollars and zero cents ($323,000.00), and funds are available from the City Recreation and Parks Department, which will contribute One Hundred Seventy-Seven Thousand Dollars and zero cents ($177,000.00) toward the settlement. Other non-City parties in the lawsuits are paying Gutknecht One Hundred Twenty Thousand Dollars and zero cents ($120,000.00). Gutknecht in turn will pay its involved subcontractors, Mr. Excavator and Epic Steel.
Emergency action is requested for this ordinance to be effective immediately in order for the parties to effectuate the settlement of these lawsuits in accordance with the terms of the settlement agreement, which is in the best interest of the City, and to pay the agreed sum without delay.
Title
To authorize and direct the City Attorney to settle the lawsuits known as: Gutknecht Construction Company v. City of Columbus, Ohio, Case No. 21-CV002381; Gutknecht Construction Company v. City of Columbus, Ohio, Case No. 21-CV002382; and Mr. Excavator, Inc. v. Gutknecht Construction Company, et. al., Case No. 21-CV001568; and related case, Epic Steel Company v. Gutknecht Construction Company, et al., Case No. 20-CV00594, all pending in the Court of Common Pleas of Franklin County, Ohio; to authorize the transfer and expenditure of the sum of Five Hundred Thousand Dollars and zero cents ($500,000.00) in settlement of these lawsuits; and to declare an emergency. ($500,000.00)
Body
WHEREAS, in 2020 and 2021, lawsuits were filed by Mr. Excavator, Inc. and by Gutknecht Construction Company, respectively, in the Court of Common Pleas of Franklin County, Ohio, against the City of Columbus, and others involved in the construction projects, claiming monetary damages; and
WHEREAS, following the evaluation of the claims and the risk of continued litigation of the claims against the City of Columbus, a settlement in the amount of Five Hundred Thousand Dollars and zero cents ($500,000.00) to be paid by the City, was deemed acceptable by the City of Columbus, Department of Finance and Management, and by the City Recreation and Parks Department, along with the dismissal of these cases with prejudice and release of the City of Columbus and its employees from any further liability; and
WHEREAS, an emergency exists in the usual daily operations of the Department of Finance and Management and the Recreation and Parks Department, in that it is necessary for this ordinance to be effective immediately in order for the parties to effectuate the settlement of these lawsuits in accordance with the terms of the settlement agreement, which is in the best interest of the City, and to pay the agreed sum without delay; NOW, THEREFORE
BE IT ORDAINED BY THE COUNCIL OF THE CITY OF COLUMBUS:
SECTION 1. That the City Attorney be and hereby is authorized and directed to settle all claims against the City of Columbus, its officers, agents, and employees pending in the cases known as Gutknecht Construction Company v. City of Columbus, Ohio, Case No. 21-CV002381; Gutknecht Construction Company v. City of Columbus, Ohio, Case No. 21-CV002382; Mr. Excavator, Inc. v. Gutknecht Construction Company, et. al., Case No. 21-CV001568; and Epic Steel Company v. Gutknecht Construction Company, et al., Case No. 20-CV005949, pending in the Court of Common Pleas of Franklin County, Ohio by payment of Five Hundred Thousand Dollars and zero cents ($500,000.00) as a reasonable and fair amount and in the best interest of the City of Columbus.
SECTION 2. That the transfer of $177,000.00 or so much thereof as may be needed, is hereby authorized between projects within the Recreation and Parks Bond Fund 7702 per the account codes in the attachment to this ordinance.
SECTION 3. That the expenditure of $193,260.76, or so much thereof as may be necessary to pay the cost thereof, be and is hereby authorized from the Recreation and Parks Voted Bond Fund 7702 in object class 06 Capital Outlay per the accounting codes in the attachments to this ordinance.
SECTION 4. That the expenditure of $66,127.61, or so much thereof as may be necessary to pay the cost thereof, be and is hereby authorized from the Safety Voted Bond Fund 7701 in object class 06 Capital Outlay per the accounting codes in the attachments to this ordinance.
SECTION 5. That the expenditure of $75,000.00, or so much thereof as may be necessary to pay the cost thereof, be and is hereby authorized from the Street & Highways Bond Fund 7704 in object class 06 Capital Outlay per the accounting codes in the attachments to this ordinance.
SECTION 6. That the expenditure of $100,000.00, or so much thereof as may be necessary to pay the cost thereof, be and is hereby authorized from the Public Safety Taxable G.O. Bonds Fund 7705 in object class 06 Capital Outlay per the accounting codes in the attachments to this ordinance.
SECTION 7. That the expenditure of $65,611.63, or so much thereof as may be necessary to pay the cost thereof, be and is hereby authorized from the Construction Management Capital Improvement Fund 7733 in object class 06 Capital Outlay per the accounting codes in the attachments to this ordinance
SECTION 8. That, upon the receipt of an approved invoice and a release approved by the City Attorney, the City Auditor be and is hereby authorized to draw a warrant upon the City Treasurer for the sum of Five Hundred Thousand Dollars and zero cents ($500,000.00) payable to Gutknecht Company.
SECTION 9. That for the reason stated in the preamble hereto, which is made a part hereof, this ordinance is hereby declared to be an emergency measure and shall take effect and be in force from and after its passage and approval by the Mayor or ten days after passage if the Mayor neither approves nor vetoes the same.